Baker v. Casey

• Citation: 112 P.2d 1031,166 Or. 433
• Parties: BAKER <I>v.</I> CASEY
• Decision Date: 29 April 1941
• Court: Supreme Court of Oregon

166 Or. 433

112 P.2d 1031

BAKERv.

CASEY

Supreme Court of Oregon.

Argued April 16, 1941.

Affirmed April 29, 1941.

Fraud — Actionable fraud

1. To constitute actionable "fraud" based upon misrepresentation, it must appear that defendant made material representation falsely, knowing that it was false, or that he made it recklessly without knowledge of its truth and as a positive assertion with intention that it should be acted upon, and that plaintiff acted in reliance upon it to his injury.

Fraud — Exchange of property

2. A complaint alleging that representations made by defendant were material and false and were known by him to be false when made, and that plaintiff, without knowledge of their falsity and in reliance upon them, was induced to exchange her property for that of defendant, stated cause of action for "fraud".

Fraud — Exchange of property

3. In action for fraudulent representations inducing exchange of realty, it was necessary for plaintiff to establish that she believed defendant's representations to be true and that because of such belief she acted to her injury, but it was not necessary for her to allege existence of a fiduciary relationship.

Fraud — Fiduciary relation

4. A right of action for fraudulent misrepresentation may exist though there is no fiduciary relationship between plaintiff and defendant.

Fraud — Reasonable care

5. A purchaser must use reasonable care for his own protection, and cannot rely blindly on seller's statements.

Fraud — Reasonable care

6. Generally, where no fiduciary relationship exists between parties dealing at arm's length and no device or artifice is used to prevent an investigation, purchaser must make use of his means of knowledge, and, failing to do so, cannot recover on ground that he was misled by seller.

Fraud — Exchange of property

7. Where contract for exchange of plaintiff's realty in Eugene, Oregon, for defendant's realty in Los Angeles county, California, was signed in Eugene, and plaintiff had no opportunity to inspect defendant's property, rule that purchaser must make use of his means of knowledge, and failing to do so, cannot recover on ground that he was misled by seller, was inapplicable.

Contracts — Fraud

8. Ordinary contract induced by fraud is not void, but merely voidable at option of party injured by fraud.

Fraud — Election of remedies

9. A party induced to enter into contract by fraud may either affirm contract and sue for damages or disaffirm it and be reinstated in the position in which he was before it was consummated, but these remedies are inconsistent and not concurrent, and the adoption of one is the exclusion of the other.

Contracts — Rescission

10. If party induced to enter into contract by fraud desires to rescind, he must act promptly and return or offer to return what he has received under contract, and any delay on his part, and especially his remaining in possession of property received under contract and dealing with it as his own, will be evidence of intention to abide by contract.

                  See 23 Am. Jur. 968
                  26 C.J., Fraud, § 3
                

Before KELLY, Chief Justice, and BAILEY, LUSK and RAND, Associate Justices.

Appeal from Circuit Court, Lane County.

G.F. SKIPWORTH, Judge.

Action for fraud by Susan Baker against J. Wesley Casey. From a judgment for plaintiff, defendant appeals.

AFFIRMED.

Frank B. Reid and Clyde N. Johnston, both of Eugene, for appellant.

H.E. Slattery, of Eugene, for respondent.

RAND, J.

Plaintiff brought this action to recover the damage resulting to her from certain alleged false and fraudulent representations of the defendant by which the plaintiff was induced to exchange her house and lot in Eugene, Oregon, for other real property belonging to the defendant in Los Angeles county, California. Plaintiff, at the time, was a resident of Eugene and unfamiliar with defendant's property. The representations were in respect to the location of the property and the kind, character and condition of the buildings thereon.

The cause was tried to a jury and a verdict was rendered in favor of the plaintiff for the sum of $2,500. From the resulting judgment, the defendant has appealed.

At the close of plaintiff's case in chief, the defendant moved for a judgment of involuntary nonsuit. This motion was overruled and defendant assigns this ruling as error. The ground upon which the motion was based was defendant's contention that the complaint failed to state a cause of action. No demurrer to the complaint was filed and the objection was urged at the close of plaintiff's case in chief.

1, 2. It is settled by an unbroken line of decisions in this state that, to constitute actionable fraud based upon misrepresentations, it must appear that the defendant made a material representation falsely, knowing that it was false, or that he made it...